Opportunity Cost

Today my econ brain is more active than usual. As such, I see much clearer the results of people’s choices, including my own, and the opportunity costs it took to get those results.

Knowing about the results, I wonder if people are rational? Economics assume people are rational for the purpose of providing empirical results, given everyone has the same amount of information and knowledge to process problems.

This assumption is far from reality. We live in a very unfair world; life isn’t fair. Some people are born more gifted, some people have less resources, while others are born with closer knit community. Everyone has different backgrounds and perception of the world around them. 

One thing remain constant: everyone still have opportunity costs no matter where they are. There are always choices. Often you pick one choice, you forego the other. There is always a price, an opportunity cost, whether it is time, money, emotions, energy, potentials. 

So now I ponder, where is the limit? What are people willing to trade to get what they want?

Now one thing to consider: opportunity costs only apply to business/conditional relationships. Opportunity costs does not apply on family relations.

First I need to define the relationship I’m referring to (because English language is limited): it is the state of being related, not the state of interaction. Just like how the parable of the lost son, even though the son squandered his father’s money and left, it does not change the fact he is still his son. Another example is even though if a parent has Alzheimer’s and forgets you, it does not change the relationship status. There is no cost; the relationship is unconditional; it exists because it is.

This is what Jesus offers, it is this status of unconditional relationship. It is not a business deal: “here is something for this of yours”. It is an invitation, “come and be adopted”. 

Is this too good to be true? How? Why?

Because God is love; it is His character and does not change ever. He made the world perfect.

Humans are a different story though.

The opportunity cost to make humans able to love is allowing them able to choose not to love; humans were capable of choosing between good and the absence of good, which we now know as the word evil, both moral evil and natural evil.

Moral evil is what people do and the choices they make, that is what makes people hungry, that is what causes wars, that is what causes heartbreaks, that is what causes people to get shot.

Natural evil is when the earth became cursed, like wildfires, earthquakes, tornadoes, tsunamis. When we humans told God to shove off, He partially honored our request. Nature began to revolt. The earth was cursed. Genetic breakdown and disease began. Pain and death became part of the human experience. 

Here is a less-than-perfect analogy for this opportunity cost God took: even before parents had children, couldn’t they foresee that there was the very real possibility they may suffer disappointment or pain or heartache in life, or that they might even hurt the parents and walk away? Of course — but parents still had kids. Why? Because they knew there was also the potential for tremendous joy and deep love and great meaning.

“God took the very worst thing that has ever happened in the history of the universe — the death of God on the cross — and turned it into the very best thing that has happened in history of universe: the opening up of heaven to all who follow Him.” http://www.biblegateway.com/blog/2012/07/why-does-god-allow-tragedy-and-suffering/

I got lazy and decided to use someone else’s blog, but it’s pretty filling.

Anyways, the opportunity cost of following Jesus is your fleshly body. It seems to be a big price, but it’s actually not, considering what people’s flesh is. It’s mortgages, bankruptcy, or in accounting terms: “accounts unpayable”. What you need to give up is your values and exchange it for Jesus’s values, in essence, allow Jesus give you a new heart.

So many people asked me, what are you doing with your degree in economics? This is a part of the answer.

This is what studying economics do for me, more than learning equations and strategies and policies, economics allow me see things in a bigger perspective rationally.

What looks bad in the short term may be good for the long term, and what looks good in the short term may be bad for the long term. 

I’m reading this book called Good to Great by Jim Collins. It’s a book analyzing how companies turn from good to great. One of the commonalities between them is they didn’t do more, but they focused on what to stop doing and give up for the greater good. 

Totally makes sense: in order to be greater than what you are now, you need to shed away the crap and hinders your goals. 

Then the question quickly becomes: What is your values and goal in life? If the “crap” you need to get rid of to achieve that goal is actually good, you should reevaluate your goal and your values. Don’t let your opportunity cost be higher than your result.

When I decide to follow Jesus, I know my opportunity cost is nothing compared to the result. Even now when I decided to go on missions to Thailand, I know the opportunity cost (my career/family approval/personal comfort)is nothing compared to the result of people’s lives saved and changed eternally. 

Yes, if anyone sees this and wants to support whether by prayer or financially for this trip, please message me. I’ll be leaving June 19th and I need the funds sent in by 15th. When you allow God to use your resources, you will not regret it, in fact, you’ll be more at peace because you know someone’s life will be changed and you are part of the reason why.

This was supposed to be a short rant about opportunity costs, but stuff popped up in my mind and I just had to keep writing.

So this is an example of what I think about when I lie down on my bed.

 

 

 

 

 

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